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Meet Velas: When Artificial Intuition Boosts Blockchain Capabilities

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Mon, 08/12/2019 - 12:39
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  • Velas, a Switzerland-based Blockchain project, solves the scalability trilemma by putting artificial intelligence (AI) in charge

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Contents

The crypto space is continuously expanding, and so is the number of blockchains. The abundance of projects might seem overwhelming at this point, but that doesn’t mean that new players should be overlooked, as some of them seem to present innovative ideas that could actually push the industry further. 

Enter Velas, a type of delegated Proof of Stake (dPoS) blockchain project and an ecosystem on which one can build projects and dApps, tokenize, as well as issue smart contracts practically with almost any cryptocurrency. Still sounds like something you’ve heard many times before? Here comes the twist: this blockchain is enhanced by Artificial Intuition (AI), so a substantial part of the governing is performed by a machine. Well, sort of. Let’s have a closer look.

The Basics: AI and AIDPOS

Velas was founded in 2019 and is currently headquartered in Switzerland. It stands for Virtual Expanding Learning Autonomous System. In the industry where decentralization has yet to be fully implemented by any project regardless of its consensus model of choice, Velas takes a slightly different, newer approach. While drawing upon the DPoS concept, it lets AI be the judge and pick which delegates should govern its network. Moreover, the project aims to address the crypto's persisting scalability issue and strives to make the network more inclusive to delegators and block producers.

Although the project itself is new to the crypto market, it has a team of seasoned international specialists behind its back. It was founded by Alex Alexandrov, who is also the CEO of CoinPayments, the world’s first and largest altcoin payment processing platform.

As mentioned above, the project largely revolves around Artificial intuition, but that doesn’t mean that it solely controlled by some unpredictable robot. In the case of Velas, AI aims to function similarly to human consciousness, or, more specifically, its intuition — according to its creators, at least.

Thus, the consensus model is called AIDPOS (AI-Operated delegated Proof of Stake). As per the technical paper, each node in the blockchain forms its own dataset (or, in other words, a training sample) from the blockchain data. Then, based on this data, the genetic algorithm starts training by utilizing a matrix with random weights, and every next layer is learning from the previous one. The network trains itself before each block cycle until a 70% probability is obtained. After that, the matrix with the smallest error percentage gets loaded into the next era. That allows the network to continuously optimize and expand its efficiencies with AI, all the while imitating human intuition. Essentially, that means that the AI elects the network’s block producers, evaluates the size and timing of those blocks, controls the network’s tempo, etc. — all based on its trained algorithm. 

Moreover, Velas takes precautions against 51% attacks and double-spend attacks by implementing a cycle-block every 24 hours, selecting the nodes who have the most stake to represent it. Thus, new blocks must be signed by the 80% of cycle-block nodes — which makes it illogical for intruders to break the system since they will have to own the whole network first in order to do it.

Governance Model: Staking and Rewards

So, as with other DPoS projects, verification of transactions is executed through “staking” (holding) coins on the network, but with some nuances. Validators will be compensated for staking and training the AI by being able to collect network fees over a period of time. The larger the position staked, the more VLX — the native utility token — is assigned. As a result, that PoS approach aims to incentivize sizable, long-term investments, while the AI algorithm ensures effective block producing and transacting, but also behaves as a reputation manager for stakers on the blockchain through evaluating their input and behavior. 

VLX Token and Velas Wallet

The exact amount of VLX supply is 2,000,000,000, with 12.5% locked for the Velas Developer Fund and another 25% for private investors. VLX can reportedly be used to power smart contracts, conduct transactions, or pay fees on Velas Wallet at a 25% discount. In addition, VLX will be used as the primary trading coin for CoinPayments, and will provide 25% trading fee discount as well.

Indeed, the blockchain supports a secure multi-wallet technology which allows for seamless transactions with other blockchains. To achieve that, their wallet allows creation of public and private containers for all of the supported tokens, including Bitcoin and Ethereum, along with other popular cryptocurrencies such as EOS, XRP, and Monero. All containers can be restored from the original seed or private key associated with the Velas Wallet, according to the developers. 

Battling Scalability

Finally, Velas claims that its blockchain has overcome the scalability issue, operating at a hefty 30,000 Tx/sec. That could be compared to VISA’s levels of performance, while top cryptocurrencies like Bitcoin and Ethereum are lagging far behind at 7 and 15 Tx/sec respectively (note it de-facto presents off-chain scalability for those slower tokens through its above mentioned multi-wallet technology). 

Thus, to break one of the crypto’s most long-standing curses, Velas blockchain once again makes the best of its AI, which basically clears the ledger from unnecessary workload, allowing either to accelerate or slow down the whole network depending on the functioning capacity. The high speed is also achieved thanks to Schnorr signatures — specific type of multi-signature that provides cryptographic proof when one wallet is owned by multiple parties. 

Near-future Roadmap

The project  is still on its private sale and is currently preparing to release its multisig wallet. Additionally, its VLX token is expected to get listed on major exchanges later in August. 

Early next year, Velas is planning to go full-open source, release a hardware wallet, and launch by Q2 2020.

New era of blockchains?

Overall, Velas seems to be an advanced, highly technically project — which is hardly surprising, given that it actually attempts to add AI into the already-complicated world of blockchain.

If all goes according to plan and the project’s neural network manages to train itself to effectively govern a blockchain network, we could be witnessing an entirely new generation of blockchains, the ones where decentralization is ensured by tamper-proof, impartial algorithms rather than biased parties.

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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  • Bitcoin (BTC) crashed to its lowest since December 2018 last week thanks to coronavirus — but for traders, cryptocurrency is now offering unparalleled opportunities

Cover image via stock.adobe.com
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The article was written in collaboration with TabTrader.

Bitcoin (BTC) crashed to its lowest since December 2018 last week thanks to coronavirus — but for traders, cryptocurrency is now offering unparalleled opportunities.

After several weeks of global stock market turmoil, Bitcoin was no longer able to escape the knock-on effect. Panicked investors seemed to sell whatever they could to cover losses elsewhere, and volatility across cryptocurrency markets exploded.

On March 12, 2020, BTC/USD saw its biggest single-day drop in history — at one point, losses totalled 60% on some exchanges.

Graph

BTC/USD chart on BitMEX. Source: TabTrader Web

Many expressed surprise and shock at what had happened. The last time Bitcoin traded below $4,000 was towards the end of its year-long bear market, following its trip to current all-time highs of $20,000.

Since then, an astounding recovery has taken place — and this time around, over a much shorter timeframe. Just one week after the crash, BTC/USD was tapping $7,000, before calming its advance to circle $6,000 support. 

Suslov: Whales are profiting from today’s crypto market

Even for cryptocurrency traders, such moves are rare, and capitalizing from them with the maximum effect is even rarer.

“The market has seen its bottom. And a recovery can be very swift. It is the best time to accumulate, and that’s exactly what the whales are doing,” Kirill Suslov, CEO of exchange aggregator TabTrader, summarized about the current climate.

Several thousand dollars up or down in days or even hours creates a logistical headache for many traders, who rely on multiple exchange interfaces all working seamlessly in order to place what are often highly sensitive trades.

Whales themselves can add to the problem, as was seen earlier in the year when a single trader appeared to move the entire Bitcoin market using a wall of orders on exchange Bitfinex.

Other phenomena often crop up which impacts a specific platform’s order book. This week, for example, BTC/USD broadly failed to crack $7,000, but on Bitstamp, a one-minute wick saw orders filled up to $7,139.

...And traders want to be copycats

Allowing anyone to monitor the major exchanges and trade funds on them at the same time was to some extent the impetus behind TabTrader and similar aggregate resources such as portfolio trackers. Price volatility, fluctuations in trader behavior and more only make business better for the sector, Suslov says.

“In summer 2020 Covid-19 will be behind us and asset prices will rise and crypto can potentially see exponential gains because of its role as a high-beta asset,” he continued.

BTC/USD on Bitfinex. Source: TabTrader Android

BTC/USD on Bitfinex. Source: TabTrader Android

Like exchanges themselves, Suslov has seen a marked turnaround in habits of his own clients — exchange traders with total holdings in excess of $6 billion.

To respond to demand, TabTrader is rolling out tailored options such as allowing traders to put any charts for any exchange into one area, then trade from that single screen using APIs.

Watchlist. Source: TabTrader Android

Watchlist. Source: TabTrader Android

Aiming to reduce the inefficiency of manually monitoring myriad platforms, each with their own peculiarities, other plans include customizing those trading terminals themselves to suit traders’ requirements.

Ultimately, Suslov says, a trading sector which is open to anyone on earth must be as efficient as possible, as its appeal will only spread to more non-technical mainstream consumers.

“This year, we will be letting traders copy the moves of exchanges’ most successful players,” he added, a move which echoes those of platforms such as UK-based eToro. TabTrader, however, will not take custody of any funds.

“Not your keys…” 

That’s the potential teething-problem-in-waiting for the cryptocurrency trading ecosystem, various analysts have warned. 

An influx of interest has not translated into traders becoming more crypto-aware — all too often, they trust third parties to store funds for them, with all the risk that that entails. According to one recent survey from Binance, even the vast majority of institutional investors do not control their private keys.

Nonetheless, the current turmoil facing the world’s economy is something that will undoubtedly benefit Bitcoin as the world’s first truly decentralized hard cap digital money.

“The virus has shown us the problem of the governments, with citizens being just servants who can be confined, blocked, isolated etc.,” Suslov concluded. 

“Governments can do whatever they want to us. Cryptocurrency can fight back, at least in the financial domain. The long-term future of Bitcoin and cryptocurrency is bright.”

About the author

Heewon Jang is a freelance journalist and the editor of CryptoGags section.
She is responsible for entertaining crypto content and bitcoin humour

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